tv [untitled] July 13, 2011 6:30am-7:00am PDT
granted there are a few projects with unforeseen conditions. i think having that reserve is a good position to be right now. i do appreciate your concern. and you can be assured that i will not take these responsibilities lightly. commissioner torres: i trust you. i just do not trust the bidder. commissioner moran: this is giving the whole reserve more visibility. what is happening, we were wondering how much contingency to leave within our individual projects. this puts them all into a lump that makes it much more obvious, that makes it more transparent than when they were embedded in
individual projects. we will be able to make it really clear to project managers and to everybody else that if there are changes, it is a very visible thing that people will be noticing, and that is also a deterrent. commissioner moran: i have to stay in the entire presentation, this is the thing i love the most. is very hard to get project managers to cut loose of the. -- it is very hard to get project managers to cut loose of its. it is very important. i would suggest that you keep on doing that. $161 million may sound like a lot of money, but when things go wrong, it is not much of all.
as to see opportunities to take savings -- as you continue to see opportunities to take savings, adding that would be advised. president vietor: my goal is to never go up if i can. >> and in the city when you finish a contract, sometimes you leave money in a project and it goes away over time. 1 projects are really fleshed, we take the money very, very quickly. party main reason to do this was accountability, visibility. i worked very closely with bawsca to put this together in a way that would satisfy them, tracking changes in the reserve. president vietor: do you anticipate spending that $161 million? >> no, i do not. president vietor: then what
happens to the project? >> the rate payers benefit by the lower rate increases. president vietor: great. mr. secretary, if you can -- >> i of one more slide. it is a recap. is everything i have asked you to approve today. with a very minor changes. the overall completion date of the program is pushed back eight months. de of overall program budget remains the same -- the overall program budget remains the same. we are going to be moving $161 million of savings into a program management reserve to increase accountability and visibility. we like the implementation of five local water supply projects, while staff will continue to assist with the
delivery of these projects, and in closing, i would like to thank you for the opportunity to share with you the revised proposal and for the trust you placed in our team. i greatly appreciate the support the commission has given us since the beginning of the program. impersonally very excited -- i am personally very excited by the progress that is made in the wsip and i'm grateful to be joined by a team of talented and dedicated staff. commissioner caen: thank you. is said there's going to be in august report on the water cycles? >> yes. commissioner caen: we do not have a real commission meeting, so -- >> yes. we thought if we got this report-by august 31 come up with
the you would get to -- we thought if of this report by august 31, he would get a chance to look at. commissioner caen: great. is this in the same time line? >> the next report for the wsip will be -- will calculate overall performance differently. commissioner caen: and the cost savings that may or may not be generated -- >> at that point, no. we will not give them additional money. they will not give us back money. that will beam -- that will be managed through the water enterprise cip. >> there will be savings and additional costs. president vietor: questions or comments? commissioners? commissioner caen: would you
mind going through this and answering some of those questions? >> yes, and maybe i could address that as well. first, i understand that barbara pierce is here. she is the chair of the board of bawsca . i want to welcome her and mr. jensen as well and thank them for their comments. we appreciate your letter. i just want to put that out there. i understand that we also have an amendment before us. i do not know if we need to take the motion quite yet. but my understanding is the amendment that you have before you -- the amendments that you have before you were crafted to address issues in the bawsca
letter. >> i would be happy to walk you through those. >> if you would. and th from bawsca as well. >> sure. and talks about the draft to proposed changes, the discussion about meeting the level of service goals, as well as the definition of the term scope and service change. they want to make sure we define our terms and also require that level of service. the second one is one we talked about here already, or the commission directed staff to report back to the commission on what is happening in terms of the water supply issue. how will we make up that difference? well will happen to make sure we stay on the target for those goals? the third is a specific item
from bawsca that was about the regional groundwater storage and discovery project. there are issues about that. we're directing staff to report that -- to report back on what is happening with that project. the fourth is a mixture of different things in the bawsca report, but basically we request an update periodically on the project costs. again, having the reserves set aside is one thing. making sure we report back to you on the status of that reserve it is part of the visibility and correct reporting for it. the intent of the commission is any savings for wsip will result in other was projected rates. of course, it goes back to the
ratepayers. the final is really an additional commitment by the commission that we stay to this schedule. we are asked to review coming into construction. we believe this is essential. it does also note that in our water supply agreements, and we did have a date of december 2015 for the end of wsip. now that we are officially projecting that date, we need to work out with the customers in bawsca , how do we address this? i think those of were the issues that were raised their. -- raised there. president vietor: before we introduce bawsca and take comment, is there motion to introduce amendments? >> said moved. commissioner moran: the
different completion dates we're talking about resolving are the completion dates. >> yes. commissioner moran: the different days, i think it would be helpful. president vietor: just to insert it? ok. mr. jensen's, would you like to make comments on that the amendment and respond to commissioner caen's questions? >> a would be happy to. and represent bawsca . last month, members of the board of directors of bawsca and staff had two construction projects and their progress was very impressive became -- very impressive. their work is excellent. it is a reflection of the good work by ms. labonte and her
staff. one of the most startling changes is when you visited the facilities, you have people talking about what they did not have and what they could not get done. now people were excited, they're talking about what they were doing. it was quite refreshing. people were excited about their work. the extension of vw sip -- the wsip completion date is very serious. this is a tough program and it will continue to be challenging for the next five years. we hope we have constructive recommendations. it appears so. we did see a draft of the
resolution amendments before you. there were very responsible recommendations. with that, i would like to introduce the chair of our board, barbara pierce, and i would be happy to come back and answer any questions you may have. president vietor: thank you. thank you for joining us. >> my name is barbara pierce and in the chair of -- and i am the chair of the board of directors of bawsca and on the board of directors. the proposed schedule revisions puts the completion of the program beyond the date and the water supply agreement, and they should realize every day the system continues to be vulnerable to disasters collapse of nature, resulting in a reduction of the health and
well-being of our water users. for a bit of history, starting in 1995, six years after the loma prieta earthquake, bawsca took over the local regional water control system. are continuing in primary concern -- are continuing and primary concern. bawsca is very pleased with san francisco determination to get this job done and the caliber of management and staff. id is really appreciated. an extension of the schedule raises concerns four us. so there are five more years to go. bawsca is committed to working with san francisco to complete the program as soon as possible. during the 2009 water supply
agreement, we agreed to fund our share of the costs so that the initial burden to finance these capital improvements would not fall solely on san francisco customers. in that agreement, the city and county of san francisco agreed to complete a program by the end of 2015, 15 -- by the end of 2015. the program is huge. reprogrammed schedule provisions put completion of the program beyond the date to which san francisco committed in that water supply agreement. in reviewing the proposed recommendations by your staff, we worked very hard to provide constructive recommendations and we ask the commission to incorporate them in your actions today. we really do appreciate the proposed amendments. we really do think they speak to the concerns we raise, and we appreciate the relationship we have. thank you very much.
if additional questions, mr. jensen is here. thank you very much. president vietor: thank you. mr. jensen? commissioners, do you of questions? >> i guess i have a related question. i do not know if this is for bawsca or for our staff. , george do we think the current project estimates are -- how mature do we think the current project estimates are? what are the current dollar estimates going to be? one of the initial proposals said we say no more revisions. i am curious as to how confident we are that this set of amendments in 2011 will be close to the final schedule and budget.
>> certainly, are testament in reviewing the report -- somebody spoke to this earlier this afternoon -- we have far more information than we did in 2005. these schedules should crystalize well. based upon all the work that has been done, we feel and we are increasingly confident -- and i like -- i will let staff respond to your question. >> if i could put a word in. i think these projects virtually start here with an early design, a lot of environmental review. i do not think anyone looking back in 2002 would imagine a program eir. the environmental review process is really hard to control. regulatory issues that have come up on these projects happen
really huge and have taken much longer than they should. in their cost more than would have been expected. relatively speaking -- it is clearly not easy when you're out there, but it is much more controllable. you decide, this is what is going on. this is what we can do about it. the environmental process -- i think we're much more comfortable at this point with the project schedules, because we are in construction. we are really are a real time out there doing these things every day. that makes it so much easier to control. mr. jensen said we do run into things. i think we are much more confident. >> for whatever project is currently in construction, it is
based on the contractors' schedule, and the contractor is held responsible if the project falls behind. and unless we have extreme conditions in the field, i feel that we will be able to stick with our schedules. whether we encountered unexpected conditions -- a boring machine stock in the san francisco bay, that could definitely have an impact on our schedule -- but there are very few projects left in pre- construction, and ed is absolutely right. the unforeseen conditions are these field conditions, in so far, so good. we have our relatively high confidence level. president vietor: thank you.
any other questions on the amendments? commissioner moran: i have some stuff on the -- president vietor: resolution? ok. maybe we can vote on the modified agreements. all those in favor? opposed? amendments carry. now for the resolution. are there questions or comments? commissioners? commissioner moran: just a couple things. in the separation of the local water supply projects, and we have had some chatter back and forth. my concern is they are part of the defined wsip. they do have and have sex. -- have an effect.
i am concerned if they get shuttled into oblivion. i of one question, and that is how do we avoid that. i was comparing the project report we get from wsip to the project we get from the normal cip. my question is, is this a good time to look at the practices we developed in wsip? so these projects do not fall off of the radar? >> the plan is that although water enterprise will be more actively will have more active
oversight, the structure will be implemented. we will have a report on the. it will be consistent, similar to the wsip. as far as the cip, we will do a lot of things, the lessons learned that we are applying to all capital projects. >> the entire water supply discussion involves conservation. it involves a variety of things. it could be water transfer. it could be a variety of things. you have recycled water, groundwater. it is managed as a whole. as we're working towards reporting, is that also of interest? is that report in total of how
we deal with that issue, realizing capital projects. commissioner moran: that gets to another, in general. the questions raised on yield -- we are scheduled to talk on the retreat about that. it is a subject that you really need numbers in order to figure that one out. i think staff is working on putting that together, but we should be able to have, by the time we have that retreat -- one thing i would like to see is an 8.5 by 11 piece of paper that starts with what it was in 2005 and all the things that decrease that and all the things that have either happened or are part of the program to increase that and see by 2018, by 2035 what we think the resulting system yield is. there are some tricky parts to
that analysis, but we are fully capable of doing that, and, hopefully, we will be able to have back by the end of the night. commissioner vietor: great, thank you. we can take more comments on the resolution, but maybe we could introduce it first. is there a motion? >> so moved. >> second. commissioner vietor: any further questions or comments on the resolution? commissioner moran: we are basically dealing with changes in the budget and changes in schedule, and they have very different impact. changes in budget really control how much money can be spent. changes in schedules do not. changes in schedule most affect reporting as to what appears to be behind schedule or not. the work will continue anyway. whether the finance constraints
are there or not. i think the financial actions are the most binding and significance of what we're doing. i think the schedule ones are somewhat softer, but they reflect a level of intent and determination that is important on the list, but that is just a, for whatever that is worth. one thing that has been nice about the reporting structure and one of the reasons why i am interested in seeing that extend throughout the organization is that within that package was an awful lot of information. for those of us who get worried about the cost impact of that potentially, if you dig down into that enough, you can find the answers to that. that is the kind of transparency we have promised, and i think a was delivered on the wsip, and to the extent we can deliver that throughout the organization, we should. commissioner vietor: thank you.
further comment? hearing none, all those in favor? suppose? thank you, motion carries. next item. >> next item will be agenda item 10. how many of these should we try to call together? >> the next six. >> i will call items 10, 11, 12, 13, 14, and 15. commissioner vietor: in summary would be great. >> water system improvement funded program -- water system improvement program-funded amendments. 11, discussion and possible
action to approve water system improvement program-funded agreement -- amendments to agreements. agenda item 12, discussion and possible action to approve five enterprise water system improvement program-funded amendments. 13, discussion and possible action to approve three water enter -- water system enterprise improvement program funded amendments. 14, discussion and possible action to approve what -- two water enterprise water system improvement program-funded agreements. 15, discussion and possible action to approve the amendment 12 water enterprise water system improvement program funded agreement no. cs-963 and
authorize the general manager to execute the amendment, increasing the agreement by $8 million for an agreement not to exceed the amount of $34 million and increasing the agreement duration by four months and 22 days for a total duration of seven years, four months, and 22 days, subject to the board of supervisors approval. commissioner vietor: thank you. >> assistant general manager. based off of julie's presentation, i am year to present the contract, which makes up the increases on the delivery cost -- i am hear -- i am here to present the contract, so i wanted to go over the cost in more detail. when we look at the $4.6 billion, as she indicated in her
presentation, $1.2 billion is delivery costs. as you mentioned, it makes up program management, project management, engineering, construction management, environmental, and those are the costs that make up the $1.2 billion. as you know, and i have stated in several cases that this is a city-lead program -- city-led program, so we work with the local unions to get the share of working with the puc or the department of public works, and we have been very successful in about half the costs. we were able to self-perform the work for dpw, and the other half, we solicit contracts to consultants. the deal we worked out is for work that we cannot perform or specialize. we contract that out. an example of that is calaveras dam. we just do not do that type of
design for some of the complex treatment facilities, or pipeline across the falls. that's the type of work we contract out. we also contract out the gtot -- geotech work because we do not have the engineers here. those are the types of services we contract out, which makes up about $6 million. the increase we are currently talking about is $33 million if you add up all the 22 contracts that we have identified. so i wanted to put in perspective one of the other things we were working really hard on, which is to break up the contract. the wsip mix of 125 contracts that we broke down into various sizes and disciplines -- makes up 125 contracts. of this, we are asking for 22 to be modified